According to the latest report from AgFunder, the trend is clear – investment in agricultural technology is red-hot.
AgFunder notes in the report that in 2015, 499 companies drew a total of $4.6 billion from investors, which is nearly double that of 2014.
Ag tech has evolved well beyond seed genetics and biofuels, according to AgFunder CEO Rob Leclerc. Now, the sector is rife with mobile computing, sensors, drones, robotics, digital imagery, data analysis and much more.
“We continue to believe that agriculture industry is proving to be an excellent first market for many of the most exciting technology developments because there are still so many problems to solve,” he says.
The AgFunder report notes five “standout themes” to note from 2015.
1. Ag tech surpasses expectations, but is there a bubble? Not yet, according to the report. One heat check is measuring funding versus the total global agriculture market. In 2015, agriculture accounted for about 10% of the global GDP, meaning ag tech investment represents less than 0.5% of the entire agriculture market. In other words, there’s still room to grow.
2. Investors are bullish about drones and robotics. This area saw a 237% investment increase from 2014. AgFunder speculates that as global tech giants such as Yamaha, Intel and Verizon venture into the agriculture industry, advancements in drones and robotics could continue to skyrocket.
3. Biologicals “dug in” with another $120 million invested. A growing number of environmentally conscious farmers and organic noshing consumers will keep investment in this segment high.
4. Precision ag is no longer the new kid on the block, but it’s still gaining momentum. In 2015, 84 precision ag companies raised a total of $661 million. “The sheer volume coming into the subsector raised some eyebrows in the industry, particularly as data integration and standardization remain issues,” Leclerc says. “This has arguably made it challenging for some companies in this space to raise funding from new investors.”
5. Geographic diversity intensifies. U.S. companies raked in 90% of global funding in 2014 but only 58% in 2015. This is due to increased investment and reporting internationally. Other major players on the global market include Israel, China and India.
Source: Ben Potter, AgWeb.com
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